Govt Approves Surge Pricing for Ola, Uber; Fares Can Go Up to 2x Base Rate

Ola, Uber Can Now Charge Double the Base Fare as Govt Clears Surge Pricing Under New Guidelines.

Ride-hailing platforms like Ola and Uber can now charge up to twice the base fare during peak hours, as per the newly issued Motor Vehicles Aggregator Guidelines (MVAG) 2025. Released by the Ministry of Road Transport and Highways on July 1, the updated rules mark a significant shift from the previous cap of 1.5x base fare.

States have been advised to implement the guidelines within the next three months. The government says the revised structure aims to provide greater pricing flexibility for aggregators while maintaining oversight to protect consumer interests.

Bike Taxis Get Formal Recognition
In another major move, the MVAG 2025 allows the use of private motorcycles for carrying passengers through aggregators—pending state government approval. This legal backing for bike taxis is expected to ease traffic congestion, reduce emissions, and enhance affordable, last-mile connectivity.

States will be allowed to charge daily, weekly, or fortnightly fees for the use of non-transport bikes, under Clause 23 of the guidelines.

Industry Reaction: Relief and Praise
The formal recognition of bike taxis comes as a major relief for operators like Rapido and Uber, which have faced bans and regulatory hurdles in states like Karnataka.

Rapido called the move a “milestone” in India’s progress toward Viksit Bharat, saying it will help expand low-cost transport in underserved areas.

Uber lauded the update as a “balanced” step, emphasizing that state-level adoption would be key to creating consistency for both users and operators.

“We commend the ministry for its consultative approach,” an Uber spokesperson said.

Policy Shift Reflects Evolving Mobility Landscape
The MVAG 2025 replaces the 2020 version and reflects the rapid growth in demand for bike taxis, e-rickshaws, and flexible pricing across Indian cities. The Ministry said the updated framework aims to promote safety, driver welfare, and user security, while allowing for innovation and operational agility.